Question 4 Selected transactions for D. Reyes, an interior decorator in her firs

Question

Question 4 Selected transactions for D. Reyes, an interior decorator in her first month of business, are as follows. Jan. 2 Invested $10,000 cash in business. 3 Purchased used car for $4,000 cash for use in business. 9 Purchased supplies on account for $500. 11 Billed customers $1,800 for services performed. 16 Paid $200 cash for advertising. 20 Received $700 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed. 28 Withdrew $1,000 cash for personal use of owner. Instructions For each transaction indicate the following. (a) The basic type of account debited and credited (asset, liability, owner's equity). (b) The specific account debited and credited (cash, rent expense, service revenue, etc.). (c) Whether the specific account is increased or decreased. (d) The normal balance of the specific account. Account Debited Account Credited (a) (b) (c) (d) (a) (b) (c) (d) Date Basic Type Specific Account Effect Normal Balance Basic Type Specific Account Effect Normal Balance Jan. 2 3 9 11 16 20 23 28

Explanation / Answer

Abbreviations for the following: Dr = Debit, Cr = Credit; I = Increased; D = Decreased; NB = Normal balance; A = Asset; L = Liabilitiy; SE = stockholders’ equity)

Here are the journal entries:
Jan. 2 Invested $10,000 cash in the business in exchange for common stock
Dr Cash (A, I, NB is Dr)
Cr Common stock (SE, I, NB is Cr)

3 Purchased used car for $4,000 cash for use in business
Dr Motor vehicle (A, I, NB is Dr)
Cr Cash (A, D, NB is Dr)

9 Purchased supplies on account for $500
Dr Supplies (A, I, NB is Dr)
Cr Accounts payable (L, I, NB is Cr)

11 Billed customers $1,800 for services performed
Dr Accounts receivable (A, I, NB is Dr)
Cr Services revenue (SE, I, NB is Cr)

16 Paid $200 cash for advertising
Dr Advertising expense (SE, D, NB is Cr)
Cr Cash (A, D, NB is Dr)

20 Received $700 cash from customers billed on January 11
Dr Cash (A, I, NB is Dr)
Cr AR (A, D, NB is Dr)

23 Paid creditor $300 cash on balance owed
Dr AP (L, D, NB is Cr)
Cr Cash (A, D, NB is Dr)

28 Declared and paid a $1,000 cash dividend
Dr Dividend (SE, D, NB is Dr)
Cr Cash (A, D, NB is Dr)

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.